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Recent updates:

• Update: August 2022

  Dear Subscriber:

  Thank you for updating your library with the 2022 supplement of A Practical Guide to Massachusetts Limited Liability Companies . This latest product brings updated resources within your immediate reach—for fast, accurate, and practical answers to your questions.

  Highlights from the issues addressed in this update include

  • the absence of authorization for "protected series" or "registered series" in the Massachusetts Limited Liability Company Act, G.L. c. 156C;

  • substantial revisions to the guidance provided in several of the book's sample operating agreements, addressing issues such as
    • the importance of executing written operating agreements, especially for single-member limited liability companies (LLCs);
    • application of the default rules set forth in the Act;
    • principles applicable to capital account maintenance and related allocations of income;
    • language allowing for flexibility in the scope of the business activities conducted by the LLC;
    • limitations on the authority of managers versus the members of the LLC; and
    • evolving standards for the enforceability of noncompetition agreements;
    • the failure of many offshore jurisdictions to afford full limited liability to LLCs and to treat LLCs as transparent entities for tax purposes;
    • issuance of final U.S. Treasury Department regulations on the potential application of I.R.C. § 409A to payments subject to I.R.C. § 736; and
    • a recent Land Court opinion rejecting a request to partition a parcel of property constituting the sole asset of an LLC, where the LLC was 50 percent owned by each of its two members and only one member sought the partition.

  We trust you will find this latest version of A Practical Guide to Massachusetts Limited Liability Companies an invaluable resource for your busy practice.

  Very truly yours,

  John M. Lawlor, Esq., MCLE Publications Attorney

• Update: May 2020

  Dear Subscriber:

  Thank you for updating your library with the 2020 edition of A Practical Guide to Massachusetts Limited Liability Companies . This latest product brings updated resources within your immediate reach—for fast, accurate, and practical answers to your questions.

  Highlights from the issues addressed in this edition include

  • the U.S. Department of the Treasury’s issuance of final regulations, effective November 4, 2019, repealing certain documentation requirements and releasing an advance notice of proposed rulemaking on other aspects of the regulations;

  • clarification of the requirements for revoking an S corporation election;

  • allowance of certain sales by LLC members to be treated by the buyer as purchases of assets;

  • guidance on the adoption of written operating agreements by one-member LLCs;

  • provisions in sample agreements to reflect recent statutory amendments, including the handling of imputed underpayments and defining the role of the partnership representative;

  • case law on the circumstances under which a litigant may “pierce the veilâ€� of an LLC;

  • updated guidance on the tax consequences of selling a member’s interest in an LLC; and

  • updates to appended articles on choice of business entity and drafting LLC documents.

  We trust you will find this latest version of A Practical Guide to Massachusetts Limited Liability Companies an invaluable resource for your busy practice.

  Very truly yours,

  John M. Lawlor, Esq., MCLE Publications Attorney

Table of Contents

Chapter 1 expand

Introduction

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Peter M. Rosenblum, Esq., Foley Hoag LLP

Chapter 2 expand

Classification of the LLC Under Tax Law

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Nicholas V. Romanos, Esq., Foley Hoag LLP

Chapter 3 expand

Choice of Entity

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Michael E. Mooney, Esq., Nutter McClennen & Fish LLP
David A. Parke, Esq., Bulkley, Richardson and Gelinas LLP

Chapter 4 expand

Forming an LLC and Drafting the Operating Agreement

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Portia S. Keady, Esq., Nutter McClennen & Fish LLP
Christopher S. McLoon, Esq., Cozen & O'Connor

Exhibit 4A

- Partnership Example LLC Buy Form

Exhibit 4B

- Corporate Model LLC Buy Form

Exhibit 4C

- Shortform Associates LLC Buy Form

Exhibit 4D

- Initial LLC Buy Form

Exhibit 4E

- Default Provisions in the Massachusetts Limited Liability Company Act (G.L. c. 156C) Buy Form

Exhibit 4F

- Mandatory Provisions in the Massachusetts Limited Liability Company Act (G.L. c. 156C) Buy Form

Exhibit 4G

- Provisions in the Massachusetts Limited Liability Company Act (G.L. c. 156C) Requiring a Writing Buy Form

Chapter 5 expand

Operating the LLC

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Philip S. Lotane, Esq., Venture Advisors Legal LLC

Checklist 5.1

- Summary of the Rights and Duties of Assignors and Assignees of LLC Interests Buy Form

Exhibit 5A

- Form of Agreement to Transfer LLC Membership Interest Buy Form

Chapter 6 expand

Buy-Sell Agreements and Other Transfers of Interests in LLCs

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Michael E. Mooney, Esq., Nutter McClennen & Fish LLP

Exhibit 6A

- Transfer of LLC Interests: Summary of Tax Consequences Buy Form

Exhibit 6B

- Sample Operating Agreement 1: Mandatory Liquidation Clause Favoring Continuing Members Buy Form

Exhibit 6C

- Sample Operating Agreement 2: Mandatory Liquidation Clause Favoring Withdrawing Member Buy Form

Exhibit 6D

- Sample Operating Agreement 3: Mandatory Liquidation Clause Bifurcating Tax Treatment Buy Form

Exhibit 6E

- Sample Operating Agreement 4: Right of First Refusal with Tax Classification Buy Form

Exhibit 6F

- Payments in Liquidation of a Member’s LLC Interest—Ordinary or Capital Buy Form

Chapter 7 expand

Entity Transfer Actions: Conversions of Existing Entities and Mergers; Dissolutions

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Erin Meredith Klein, Esq., Foley Hoag LLP
Nicholas V. Romanos, Esq., Foley Hoag LLP

Chapter 8 expand

Interstate Business by LLCs

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Marissa N. Soto-Ortiz, Esq., Office of the Secretary of the Commonwealth

Chapter 9 expand

Creative Uses of LLCs

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Peter M. Rosenblum, Esq., Foley Hoag LLP

Chapter 10 expand

The View from the Secretary of the Commonwealth’s Office

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Marissa N. Soto-Ortiz, Esq., Office of the Secretary of the Commonwealth

Checklist 10.1

- Items to Be Included in a Certificate of Organization for a Domestic LLC Buy Form

Checklist 10.2

- Practical Tips for Handling the Formation of an LLC Buy Form

Checklist 10.3

- Items to Be Included in an LLC Certificate of Merger or Consolidation Buy Form

Chapter 11 expand

Limited Liability Entities for Professionals

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Michael J. Bohnen, Esq., Nutter McClennen & Fish LLP

Appendix

Appendices

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Appendix 1

- Comparison of Delaware and Massachusetts Limited Liability Company Statutes Buy Form

Appendix 2

- Choice of Business Entity Buy Form

Appendix 3

- Chart Summarizing Choice of Entity Factors Buy Form

Appendix 4

- Limited Liability Entities Buy Form